Watch Out for the Bad Credit Repair Companies

The Credit Repair Organizations Act (CROA) was put in place to make sure that the consumer knows their rights before choosing to work with a credit repair company.

This is one Act that really works for consumer. In fact, in 2008, the Federal Trade Commission shut down 34 credit repair organizations for violations of the CROA.

The Most Important CROA Rule to Remember

The biggest takeaway from CROA is that a credit repair company must clearly explain the payment structure to consumers seeking their help.

The best thing to remember is that you should not be giving any payment before any services have been performed. Setup or upfront fees directly violate the rules of CROA.

Before Choosing a Credit Repair Company

Don’t be scammed. Make sure you know what credit repair companies can and cannot do with your credit before making a choice.

Before you select the credit repair organization you will use to help improve your credit, make sure that they provide you with the following:

A contract that allows you 3-days to cancel if need be.

A clear description of services they will provide

Listing of payments required once services are rendered and the payment schedule

A deadline or estimate of time that all services will be completed

What Can a Credit Repair Agency Really Do For Me?

Credit repair is a possibility. But it is important to know that a lot of companies out there are not looking out for your best interest. This is why you need to understand your rights before selecting a credit repair options. Remember, there is nothing a credit repair agency can do that you can’t do yourself.

What are These Companies Prohibited from Doing Under CROA?

The Credit Repair Organizations Act makes it clear that these companies cannot partake in deceptive advertising and is prohibited from using numerous unethical practices. These include but are not limited to:

Lie about your credit history

Alter your identity in any way

Lie about the service they will provide to you

Have you pay for service before they have been completed

If you believe you’ve been victimized by a bad credit repair agency, talk to a credit lawyer about your legal options. You may be able to sue for damages or get your money back.